Marijuana Smuggler Gets Six More Years After Scheme to Reduce Sentence

(CN) – A federal court sentenced one of Florida’s most prolific marijuana smugglers to more prison time on Tuesday after carrying out an unlawful scheme to get a reduction in his 30-year sentence.

Joe Harry Pegg, who made millions running an armada of marijuana-laden boats between Jamaica and the Gulf Coast during the 70s and 80s, was set to leave prison in 2020 after serving time for drug trafficking.

But U.S. District Judge Susan Bucklew of the Middle District of Florida sentenced Pegg to six more years in prison after a jury found him guilty of conspiracy to obstruct justice, obstruction of justice and lying to federal law enforcement.

According to court documents and trial testimony, Pegg attempted to lessen his sentence by convincing a former cellmate and another man to work with police arranging undercover drug deals.

In some cases, federal judges will allow this “third-party cooperation” and reduce the inmate’s sentence if investigators show the effort substantially assisted in prosecutions.

But prosecutors must know if the inmate pursues “rule 35,” as it is known in federal sentencing statutes, and any compensation must be disclosed.

Federal authorities say Pegg directed his family and former cellmate Isidro Moreno to pay Fernando Morales $60,000 for his help and told those involved to stay quiet. When questioned, Pegg denied paying the men.

A grand jury indicted Pegg in 2016 on the obstruction charges. The investigation also ensnared two former Drug Enforcement Adminisration agents.

Samuel Murad, who helped send Pegg to prison in the 1990s, took more than $223,000 from Pegg’s brother for his part in the scheme, federal authorities say. He then demanded $700,000 more. After a plea deal in 2016, Murad received a year in a prison. Another former agent, Robert Quinn, was charged with lying to investigators.

Texas defense attorney Chad Van Cleave, who is not connected to the case, said his office frequently deals with federal sentence reductions.

“It is routine for me on behalf of a client to call up a prosecutor and say here’s what we can offer,” he told Courthouse News by phone. “When we offer a third party compensation, we have to disclose that upfront. … If the government doesn’t know about it, they will swat you down quick.”

Each district deals with these sentencing reductions differently, Van Cleave said.

“The Southern District of Florida will do this all day,” he said, “but the Northern District won’t touch this with a 10-foot pole.”

“It can be good for my individual clients but, in my opinion, it’s horrible policy,” he added. “It’s a horrible part of a horrible war on drugs.”

Pegg, a sailor who lived in the Miami suburbs, was one of the state’s top drug smugglers importing high-grade marijuana from Jamaica and Columbia during 70s and 80s. Court documents show Pegg ran a multi-million dollar smuggling ring, complete with boats, planes and offshore accounts.

The majority of marijuana came through South Florida during that era. From Miami’s Black Tuna Gang to the “saltwater cowboys” of the Everglades, these smugglers used their familiarity of small inlets and mangrove-tangled canals to evade federal authorities while moving the drugs from larger “motherships” in the ocean to trucks waiting at port.

In 1982, federal agents arrested Pegg for importing and distributing more than 300 tons of marijuana. Operation Grouper, named after bales of marijuana called “square grouper,” was the nation’s largest drug seizure at the time, netting $1 billion worth of drugs and $12 million in assets, according to the DEA.

After cooperating with the government, Pegg served four years in prison. But authorities say he went back to smuggling and agents arrested him again after linking him to a seizure of a boat off the coast of Ft. Myers carrying 10,000 pounds of pot. He is currently serving out his sentence at a federal facility in Kentucky.

Fort Lauderdale attorney Fred Haddad, who represents Pegg, declined to comment on the obstruction case, but said his client plans to appeal.

“The whole underlying case had problems,” Haddad said of Pegg’s drug conviction that netted him 30 years in prison. “The sentence was clearly excessive.”